The Sandpiper [2007] QBCCMCmr 38 (23 January 2007)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

I hereby order that the Body Corporate for The Sandpiper is responsible for the repair of the termite damage in the laundry of Lot 7.

I further order that the Body Corporate for The Sandpiper shall obtain two or more new or updated quotes for the repairs to the laundry of Lot 7.

I further order that within three months of the date of this order, the Body Corporate for The Sandpiper shall call and hold a general meeting to consider a motion to select one of these quotes, and to raise any special levy necessary to pay for the repairs.

I further order that the body corporate manager shall forward a copy of this order and statement of reasons with the notice for the general meeting required above.

I further order that if the Body Corporate for The Sandpiper fails to pass a motion selecting a quote for the repair of the termite damage, the Owner of Lot 7 at the time shall be entitled to select one of the quotes submitted to the general meeting.

I further order that the Body Corporate for The Sandpiper shall engage a contractor to undertake the repairs within to Lot 7 within 14 days of the selection of a preferred quote by a general meeting or, if not motion is passed, by the Owner of Lot 7.

I further order that if the Owner of Lot 7 at the time is required to select one of the quotes submitted to the general meeting, any motion to raise a special levy in respect of that quote shall be deemed to have been passed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0817-2006

"The Sandpiper" CTS 1068

The Sandpiper community titles scheme (The Sandpiper) consists of 7 lots and common property. The community management statement for The Sandpiper indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Building Units Plan 70557.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Marianne Blomqvist, owner of Lot 7 (applicant) on 5 October 2006. The applicant sought orders against the Body Corporate for The Sandpiper (respondent) in the following terms:

The order I am seeking is that motions 2 and 3 of the Extraordinary Meeting of 8th August 2006 be declared as passed.

PROCEDURAL MATTERS

In November 2006 the Commissioner’s Office attempted to organise a conciliation session to assist in the resolution of this dispute. Unfortunately all parties did not agree to conciliation.

Under section 243 of the Act, a copy of the application was provided to the Body Corporate and to all owners, with an invitation to the Committee and all owners to respond to the matters raised in the application. A submission was made on behalf of one owner but the Committee declined to make a submission. The applicant did not avail herself of the opportunity to inspect and respond to the submission received (see sections 246 and 244 of the Act respectively).

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

MATTERS IN DISPUTE

The application relates to the applicant’s request for termite damage in Lot 7 to be repaired. The facts of the dispute, as outlined in the application and submissions can be summarised as follows.

The applicant purchased Lot 7 in June 2006, with settlement in July and the transfer being registered in August. The Body Corporate apparently spent $180 to repair white ant damage to the manhole surrounds in the lot in July 2005. A building inspection report dated 9 June 2006 states that "Inspection through the access hole in the laundry ceiling showed moderate to extensive timber pest damage in the timber wall." and "Timber pest damage found at the base of the timber duct wall sheeting left side the laundry tub." The applicant suggests that the previous owner advised her that the Body Corporate would repair the problem.

In June 2006 two quotations for the laundry repairs were obtained by a property manager acting for the previous owner of Lot 7, in the amounts of $2,354 and $2,697. The Committee submitted two motions to an Extraordinary General Meeting (EGM) in respect of the quotes. Motion 2 sought to accept one of the quotes for the repairs. Motion 3 sought to raise a special levy for the costs of the repairs, with the amount depending on which quote was selected in Motion 2.

The EGM was initially convened on 8 August 2006. The meeting did not attract a quorum and so was rescheduled for the following week.^[1] The body corporate manager chaired the adjourned meeting^[2] for which two voting papers were submitted. Both votes were submitted by two votes to one. The applicant did not vote in respect of the motions because the settlement of the lot, and the issuing of the notice of meeting, occurred while she was overseas.

The only submission received opposes the application. The owner expresses the opinion that the damage is internal and so is the owner’s responsibility to repair.

JURISDICTION

I am satisfied that this is a matter which falls within the dispute resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act).

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about:

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

DETERMINATION

The main issue for consideration in this matter is whether the Body Corporate or the applicant is responsible for the cost of repairing the damage to the Lot 7 laundry.

Responsibility for termite damage

In the absence of any argument to the contrary, I accept the assertion of the applicant that the damage to the Lot 7 laundry was caused by termites. The issue of the prevention and treatment of termite infestations and resulting damage is one of maintenance.

Section 109 of the Standard Module (as follows) requires a body corporate to maintain common property, and, section 120 provides that the owners must maintain their lots in good condition.

(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition.

(2) To the extent that lots included in the scheme are created under a building format plan of subdivision, the body corporate must--

(i) railings, parapets and balustrades on (whether precisely, or for all practical purposes) the boundary of a lot and common property; and

(ii) doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and

(iii) roofing membranes that are not common property but that provide protection for lots or common property; and

(a) the body corporate is not responsible for maintaining fixtures or fittings installed by the occupier of a lot if they were installed for the occupier’s own benefit; and

(b) the owner of the lot is responsible for maintaining utility infrastructure in good order and condition, to the extent that the utility infrastructure--

1. An airconditioning plant is installed on the common property, but relates only to supplying utility services to a particular lot. The owner of the lot would be responsible for maintaining the airconditioning equipment.

2. A hot-water system is installed on the common property, but supplies water only to a particular lot. The owner of the lot would be responsible for maintaining the hot-water system and the associated pipes and wiring.

(4) To avoid doubt, it is declared that, despite an obligation the body corporate may have under subsection (2) to maintain a part of a lot in good condition or in a structurally sound condition, the body corporate is not prevented from recovering an amount of damages from a person (whether or not the owner of the lot) whose actions cause or contribute to damage or deterioration of the part of the lot.

In the case of a building format plan (formerly a building units plan), the boundary of a lot with common property or another lot is the centre of the wall, floor or ceiling. Accordingly the Body Corporate is responsible for the outer wall, floor and ceiling of a lot adjoining common property.

I have not been provided with any information about the origins of the termite damage. In the absence of a submission from the Body Corporate, there is no suggestion that the damage to Lot 7 was caused by something other than termites, or that the applicant or the former owner of Lot 7 brought the termites onto the lot himself (for example, in an infested wooden item). The logical inference then is that the termites entered the lot from the common property. Even if the termites entered Lot 7 from the adjacent Lot 6, a similar inference could be drawn, that they entered Lot 6 from the common property.

Maintenance extends beyond the rectification of damage or a defect, to include work that may be reasonably expected to minimise the need for future maintenance of the lot. Termite infestations can cause extensive damage and be costly to repair. Preventative treatment can be expensive, but that cost must be weighed against the high cost of eradication and repair if an infestation occurs. As a body corporate has a responsibility to maintain the common property, this includes an obligation to take reasonable preventative measures against potential pest infestations.

In the absence of evidence to the contrary, I can only assume that the termite infestation arose because the Body Corporate failed in its responsibility to maintain the common property by implementing effective termite protection. In the absence of a submission from the Body Corporate I have no evidence that the Body Corporate has taken all reasonable steps to prevent termite infestations.
While the applicant is responsible for the maintenance of the interior of her lot, the Body Corporate’s maintenance responsibilities include the rectification of damage anywhere in the scheme, including in the applicant’s lot, arising from their failure to effect adequate pest prevention.

Cost of repairs

In the absence of any evidence that the applicant or the former owner of Lot 7 have contributed to the scale of damage caused by the termite infestation, I am satisfied that the Body Corporate is responsible for all of the costs of rectifying the termite damage to Lot 7.

As the Body Corporate is responsible for the repairs they are obliged to effect the repairs and cannot avoid or defer this obligation. However the Body Corporate does have a choice, to the extent that it acts reasonably, over who is selected to undertake the work and how much is paid for the work.

Again, in the absence of a submission from the Body Corporate, there is no suggestion that there is any objection to the particular contractors or that the cost of the quotes is considered to be unreasonable for the work required. It seems merely that some owners are apathetic about voting and those who have voted against the motions object to any expenditure on the repairs.

Conclusion

On the basis of the material provided to me I am satisfied that the Body Corporate for is responsible for the repair of the termite damage in the laundry of Lot 7. I have ordered accordingly, and have made further orders to guide the implementation of this requirement.

Given that the quotes considered at the August EGM are more that six months old and may well not be honoured by the tradespeople involved, it will be necessary for the Body Corporate to either go back to those tradespeople to obtain updated quotes and/or seek new quotes for the work. A minimum of two quotes must be obtained.

I consider it is reasonable that owners have the opportunity to choose between these new or updated quotes at a general meeting. However owners should understand that it is not an option for them to refuse to pay for the repairs. I have ordered that a copy of this order and my reasons be provided to all owners with the meeting notice so that they are aware of the Body Corporate’s maintenance responsibilities.

Given the voting at the EGM, I am concerned that insufficient votes will be cast to pass a motion selecting any of the alternative quotes. Moreover, I do not consider it is appropriate for owners to delay matters further to seek more quotes. Accordingly, if the general meeting called to consider the new or updated quotes fails to select one of the quotes, the Owner of Lot 7 at the time (the applicant or any subsequent owner) shall be entitled to select her preferred quote. If the Owner of Lot 7 at the time agrees that none of the quotes are suitable, further quotes can then be obtained.

While I am concerned that the applicant has already waited some time for these repairs, some further time will be required to obtain new or updated quotes and for the legislative processes of calling a general meeting. I trust three months will be sufficient for this purpose. I would also note that the Body Corporate is entitled to consider any other motions or business at the meeting. Once the meeting has been called and a quote selected either at the meeting or by the Owner of Lot 7, the Body Corporate must take all reasonable steps to effect the repairs as soon as possible, and particularly must engage the selected contractor within 14 days of the selection.

If there are insufficient existing funds allocated to pay for the repairs, a motion to raise a special levy will also be required to be considered at the general meeting to be called to consider the quotes. If the Body Corporate fails to select a quote at the general meeting and it is left to the applicant to select a quote, I have ordered that the motion alternative to raise a special levy for the amount of the selected quote shall automatically be deemed to have been passed.

^[1] See section 48 of the Standard Module. In this scheme a quorum is at least two voters for the meeting, of which at least one must be personally present.

^[2] Under section 48(4) of the Standard Module, if the chairperson is not personally present a body corporate manager who is personally present may exercise the powers of the chair if they are authorised by the body corporate to do so. It is not clear whether the body corporate manager here had such authorisation but that issue is not material to the determination of this dispute.

Number of Scheme:	1068
Name of Scheme:	The Sandpiper
Address of Scheme:	24 Jensen Street MANOORA QLD 4870

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

The Sandpiper [2007] QBCCMCmr 38 (23 January 2007)